New estimate grows Navidad silver resources by 52%

Vancouver – Aquiline Resources (AQI-T, AQLNF-O) Navidad project has grown to become one of the biggest silver deposits in the world, according to a new resource estimate for the Argentinean silver-lead project.

Navidad hosts 127.7 million tonnes grading 110 grams silver per tonne and 1.06% lead in the measured and indicated categories as well as 49 million inferred tonnes grading 97 grams silver and 0.5% lead. That adds up to 453 million oz. of measured and indicated silver plus 153 million inferred oz. of the precious metal, and 3 billion lbs. of measured and indicated lead as well as 546 million inferred lbs. of lead.

The first thing that stands out is the size, says Aquiline president and CEO Marc Henderson. This project now clearly ranks as one of the best silver deposits found in this mining cycle, among the best in the world.

The resource increase boosted Aquilines share price by 32 or 3% in Nov. 15th trading to close at $10.84 on 590,000 shares exchanged. The company has a 52-week trading range of $5.40 to $12.25 and has 54 million shares issued.

The new resource estimate increases Navidads measured and indicated silver resources by 52% compared to the last estimate, from May 2006. Including inferred resources, the deposit increased by 88%. The average silver grade increased by 10%. While the May 2006 resource estimate included 254 drill holes distributed over five mineralized zones, the new estimate incorporates an additional 265 drill holes and adds two new zones to the deposit: Barite Hill and Loma de La Plata.

Overall, the finding cost for the current resources using current metal prices is on the order of 5 per oz., which is pretty good value in terms of exploration, Henderson says.

Loma de La Plata, which unlike the other six zones does not lie on the Navidad trend but sits alone some two km west, has proven to be a significant addition to the resources at Navidad. The resource at Loma is mainly inferred at present, with 9.1 million tonnes grading 225 grams silver as indicated resources and 17.3 million inferred tonnes grading 159 grams silver. Even so, Loma currently contributes 15% of the total measured and indicated resources; further drilling to upgrade resources is underway.

Interestingly, mineralization at Loma contains very little lead, unlike the Navidad-trend deposits. Silver is hosted in the upper latite breccia. The zone has been traced for 750 metres strike, the average width is 250 metres, and the deposit is roughly 23 metres thick on average. Loma remains open to the north and northeast. Some of the best recent results from Loma include hole 555, which returned 47 metres of 244 grams silver, and hole 557, which cut 10.5 metres of 1,162 grams silver.

The other big take-away from this report is how the Loma de la Plata discovery is really important, both in terms of ounces but also because the configuration of the zone means its amenable to open pit methods, Henderson says. And where Galena Hill has metallurgical challenges, we believe Loma will be more like Navidad Hill where the metallurgy is fairly simple.

At the Calcite NW extension zone, which sits at the northwest end of the Navidad trend zones, 18 recent holes returned consistent results. Hole 584, which intersected 16.6 metres grading 51 grams silver and 0.7% lead, shows the zone remains open to the northwest; hole 587, which returned 23.3 metres of 168 grams silver and 0.42% lead, shows the remaining expansion potential to the southwest; and hole 567, which cut 52.4 metres of 34 grams silver and 0.67% lead, further demonstrates the pattern of thicker mineralization towards the northeast.

Calcite Hill, the next zone moving southeast along the trend, has no recent drill results but the resource estimate pegs the zones measured and indicated resources at 15.4 million tonnes grading 98 grams silver and 0.71% lead, plus inferred resources of 4 million tonnes grading 76 grams silver and 0.31% lead. Similarly, Navidad Hill has not seen drilling of late but already hosts 48 million oz. measured and indicated silver plus 8 million oz. inferred silver, as well as considerable lead.

Continuing southeast, the next zone is the Connector zone where recent drill results show open mineralization to the north, especially with hole 556 drilled on the northern edge of the resource boundary returning 176 grams silver over 40.7 metres. And at Galena Hill, step-out drilling to extend the resource boundary to the east returned 10.2 metres of 67 grams silver as the best intercept.

Since taking control of the project in November 2006 Aquiline has drilled 262 holes for 44,000 metres, which makes up roughly 40% of the total drilling completed on the property.

IMA Exploration (IMR-V, IMR-X) controlled the property before Aquiline, until IMA lost it in a legal battle that reached its apparent resolution in early June.

IMA staked the Navidad property in late 2002. At the time, both IMA and Aquiline were in talks with Newmont Mining (NMC-T, NEM-N) about the sale of the nearby Calcatreu project. Included in the Calcatreu data given to IMA and Aquiline were 1,000 stream-sediment sample results taken over a 12,000-sq.-km area. Both companies signed confidentiality agreements concerning the data.

Aquiline offered to buy Calcatreu from Newmont for $2 million in late 2002, at which time neither company had examined the sediment sample results. A month later, an IMA geologist did look at the results, and noticed silver anomalies more than 2 km away from Calcatreu. IMA staked the ground 10 days later.

Aquiline examined the data six months later, after Newmont accepted its $2-million offer for Calcatreu. It also decided to stake the Navidad area, but found IMA already there. Aquiline sued IMA on March 5, 2004, charging IMA used the confidential stream samples to stake Navidad.

In her July 2006 decision, B.C. Supreme Court Justice Mary Koenigsberg found IMA’s use of the sediment data was unauthorized, and ordered IMA to hand the project over to Aquiline. IMA appealed, but lost. Aquiline is required to reimburse IMA the $18.5 million spent on exploration before Aquiline’s victory.